No other business has been as stereotyped as much as the pawn business. They’re usually identified in Hollywood movies through their offices in seedy by-lanes and dealing in stolen goods. The truth however couldn’t be farther from such misconceptions. In fact, the offices of these pawn brokers are anything but dingy and dirty. They’re well lit and more often than not located in a posh area of the city.
The economy continues with its wayward journey as a result of which the days of easy credit have almost ended. Cash strapped but asset rich middle and higher income people are now increasingly relying on pawn brokers for short-term loans. Almost anything that is considered valuable can be pawned. You can pawn a family heirloom, or jewels, antique objects, paintings, memorabilia, luxury watches, etc. In fact, the rich even pawn their luxury cars, yacht, and fine wine.
A typical clientele of an average pawn broker in a city like New York would include;
a) Middle class families in need of urgent money for education or as a stop gap arrangement for a real estate transaction.
b) Small and medium businessmen or real estate developers who need money urgently to close a deal.
c) Financers, producers, musicians or people from the entertainment industry who’re in need of urgent short term money.
Unlike banks they do not need borrowers to show proof of income or are not debarred because of a bad credit rating. All that these pawn shop owners need is a valuable or any asset that is worth the amount asked as credit. Such loans are usually short term since there are regulations in various states where it is prohibited to extend these loans beyond a stipulated period.
And if a situation arises where the borrower is unable to redeem his surety, the finance company would auction off the valuable that is pledged after informing the borrower and on ensuring that he is given sufficient time after such intimation.
It is next to impossible to secure unsecured loans or small loans from banks, thanks to strict banking regulations. Most banks do not allow you to borrow less than $3000 and that too after complying with their credit checks. But pawn brokers can lend you money as less as $30. They’re clientele is often comprised of people looking to clear their medical bills or pay their utilities bill. They’re clientele is often comprised of people looking to clear their medical bills or pay their utilities bill.